Educating the Buy Side: Off-The-Desk Learning

To learn about new products, buy-side traders can go for specialized degrees or take continuing education courses.

With financial markets, regulations and technology changing so rapidly, continuing education is an important way for traders to expand their skills and stay at the top of their game.

In addition to attending industry conferences and reading Securities and Exchange Commission filings on the latest rules or order types, there are other ways to learn things and advance your career.

"You don't have to learn everything at once. You can learn as you go," says Joan Stack at Ohio Public Employees Retirement System. Stack, who earned a bachelor's degree in economics and a master's degree in finance, took specific courses to help her when starting new products.

Stack, who has worked at five firms during the course of her career, took courses at the New York Institute of Finance in convertibles and convertible bonds.

To go deeper into technical analysis, some traders study to become chartered market technicians (CMT). Those who decide that trading isn't for them can stay in investments and go for a chartered financial analyst (CFA) degree, Stack says.

"To me, that's a sign of committed trader, someone who wants to keep learning," she says.

Robert Shapiro, global head of trading and execution consulting at Bloomberg Tradebook, emphasizes the importance of continuing education for young traders as well as seasoned professionals. When he worked at Morgan Stanley Investment Management, the buy-side firm invited experts to speak on topics such as TCA and dark pools. "It gave people context around the business and how to manage their career in a thoughtful way," says Shapiro.

Shapiro recalls reading in a magazine article about a police officer who patrolled the streets of his town on a bicycle. That police officer received 40 hours of training. With that in mind, Shapiro was struck by the lack of requirements for continuing education on the buy and sell sides. Once someone has taken the Series 7 exam and some other continuing education courses, Shapiro says, "there are no requirements for the buy side or sell side in terms of improving your expertise."

In 2010-2011, Shapiro designed an accreditation program for the brokerage firm's execution consultants with courses on algo design, liquidity, and pre- and post-trade analysis. Drawing on the model of Bloomberg University, the parent company's educational unit, Bloomberg Tradebook created a series of courses to turn its sales traders into experts. It has offered those courses to its own execution consultants in the United States, Europe and Asia.

Now the firm has about 15 courses and is offering them to buy-side traders through Institutional Investor's TraderForum. "You have younger folks who would like to absorb all the courses, then you have the mature traders who have wondered, how do you really build an algorithm and what happens in a dark pool?" says Shapiro.

Gary Stone, Bloomberg Tradebook's chief strategy officer, presented the course in New York in January and will do another class in Hong Kong in June and one in Lisbon in September. "We feel it's the next frontier for providing value add back to the buy side," says Shapiro. Today, many brokerage firms offer educational trading to their buy-side clients. "It goes along with the firms' belief in sharing what you know," he says, "and is a byproduct of transparency about where it routes orders and what are your economic incentives."

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio